Around two-fifths of people from ethnic minorities live in low-income households, twice the rate for White people.

Within this, there are big variations by ethnic group. More
specifically, the proportion of people who live in low-income households is:

20% for White people.

30% for Indians and Black Caribbeans.

50% for Black Africans.

60% for Pakistanis.

70% for Bangladeshis.

The proportion of people from ethnic minorities who live in low-income households
declined during the late 1990s and early 2000s but has been rising since
then. The net result is that the proportion in 2008/09 was lower than
that of a decade previously, but only by a bit.

Each ethnic group has seen a similar (small) fall over the last decade
in the proportion of people from ethnic minorities who live in low-income
households. The net results are a) that the gap between the proportion
for ethnic minorities and that for White people is the same as a decade ago
and b) that the ethnic groups with the greatest risk of low income are the
same as a decade ago (i.e. Bangladeshi and Pakistani).

For all ages, people from ethnic minorities are, on average,
much more likely to live in low-income households than White people. For
example, almost half of all children from ethnic minorities live in low-income households compared to a quarter of White British children. The
differences are, however, less for pensioners than for either children or
working-age adults.

For all family work statuses, people from ethnic minorities are, on average, more
likely to live in low-income households than White people. Whilst these
differences are relatively small for workless families, they are
proportionally much bigger for working families. In particular, part-working families from ethnic minorities are
almost twice as likely to be in low
income as part-working White British families: 45% compared to 25%.

Among those in working families, around 65% of Bangladeshis, 50% of
Pakistanis and 30% of Black Africans are in low income. These rates
are much higher than those for White British (10%), White other, Indians and
Black Caribbeans (all 15-20%).

In all parts of the country, people from ethnic minorities are, on
average, more likely to live in low-income households than White British
people. The differences are, however, much higher in inner London and
the English North and Midlands than in the rest of the United Kingdom.

Although, overall, the rate of low income is much higher in London than in
the rest of the country (see the
indicator on location of low income), the rate of low income for White
British people in London is actually similar to that in the rest of the United Kingdom.

More than half of people living in low-income households in London are
from ethnic minorities. This is as a result of the high proportion of
people from ethnic minorities in London who are in low income combined with
the high proportion of the total population in London who are from ethnic
minorities.

For a discussion of the reasons for the differences in poverty rates
between ethnic groups, see the 2007 report entitled Poverty among ethnic
groups: how and why does it differ? The main conclusion of
this report is that around half of the differences are due to differences in
family composition and work status but that the other half of the
differences must be due to other factors such as the prevalence of low pay.

The first graph shows the proportion of people from ethnic
minorities living in
low-income households and how this
compares to the equivalent proportion for White people.

The second graph shows how the proportion of people living
in low-income households varies by different ethnic groups, with the ethnic
groups shown being those for which sufficient data exists to derive a reasonably
reliable estimate.

The third graph shows how the proportion of people living in
low-income households varies by age group, with the data shown separately for
those from ethnic minorities and White British people.

The fourth graph shows how the proportion of people living in low-income households varies by family work status, with the data shown separately for
those from ethnic minorities and White British people. The following work
statuses are shown: all working (single or couple, with one in full-time work
and the other - if applicable - in full-time or part-time work); part working
(couples where one is working and the other is not plus singles or couples where
no one is working full-time but one or more are working part-time); workless -
unemployed (head or spouse unemployed) and workless - economically inactive (includes long-term
sick/disabled and lone parents). The self-employed and workless families
aged 60 and over are excluded from the analysis.

The fifth graph shows, for working families only (both 'all working' and
'part working'), how the proportion of people living in low-income households
varies by ethnic group. Again, the self-employed are excluded from
the analysis.

The sixth graph shows how the proportion of people living in low-income households varies by geographic area, with the data shown separately for those
from ethnic minorities and White British people. The geographic areas
shown are inner London, outer London, the English North and Midlands (i.e.
the regions North East, North West, Yorkshire & the Humber, East Midlands and
West Midlands), and the rest of the United Kingdom. Inner and outer London are shown
separately because they each have a relatively high ethnic minority population.
The English North and Midlands are shown separately because the
proportion of their ethnic minority population who live in low-income households
is much higher than in the rest of the United Kingdom.

The seventh graph shows, for each of the geographic areas above, the
proportion of people in low-income households who are from ethnic minorities.

The data source for all the graphs is
Households Below Average
Income, based on the Family Resources Survey (FRS). For 2002/03
onwards, the data relates to the United Kingdom whilst the data for earlier
years is for Great Britain (FRS did not cover Northern Ireland until 2002/03).
Income is disposable household income after deducting housing costs and the low-income threshold is the same as that used elsewhere, namely 60% of contemporary
median household income. All the data is equivalised (adjusted) to account for differences in household size and composition. Note that in 2007 DWP made
some technical changes to how it adjusted household income for household
composition (including retrospective changes) and, as a result, the data is slightly different than previously
published figures.

Both the definition of 'ethnic minority' and the division between different
ethnic minority groups is driven by the data. In the first two graphs, the
White grouping includes both 'White British' and 'White other' as the data prior
to 2001/02 does not distinguish between the two. In the other graphs,
'White other' are included in the ethnic minority figures.

The term 'household' is used to cover everyone living in a dwelling whereas
the term 'family' is used to cover an adult and their spouse (if applicable).
So, a young adult living with their parents would count as one 'household' but
two 'families'. Note that an alternative – and more technically correct - term
for 'family' is 'benefit unit'.

To improve its statistical reliability, the data in the second
to fourth graphs is the average for the latest three years.

Overall adequacy of the indicator: medium. The FRS is a well-established
annual government survey, designed to be representative of the population as a
whole, but both the ethnic classification and sample sizes limit what analyses
can be undertaken.

Overall aim: Halve the number of children in poverty by 2010-11, on the way to eradicating child poverty by 2020.

Lead department

HM Treasury.

Official national targets

Reduce by a half the number of children living in relative low-income by 2010/11.

Other indicators of progress

Number of children in absolute low-income households.

Number of children in relative low-income households and in material deprivation.

Previous 2004 targets

Halve the number of children in relative low-income households between
1998/99 and 2010/11, on the way to eradicating child poverty by 2020, including:

reducing the proportion of children in workless households by
5% between spring 2005 and spring 2008; and

increasing the proportion of parents with care on Income
Support and income-based Jobseeker's Allowance who receive maintenance
for their children by 65% by March 2008.

By 2008, be paying Pension Credit to at least 3.2 million pensioner households. While
maintaining a focus on the most disadvantaged by ensuring that at least 2.2
million of these households are in receipt of the Guarantee Credit.